Changes Coming in Innovation Center Payment Models

Future Medicare payment models will probably feature less risk for participants and a greater emphasis on health equity.

At least that is the vision shared by Centers for Medicare & Medicaid Services chief operating officer Jon Blum during a recent conference.

While not backing away from including risk in future value-based purchasing models, CMS and the Center for Medicare and Medicaid Innovation Center will probably propose fewer full-risk models, which the agency fears favor wealthier providers that can afford to shoulder more risk to begin with, and a greater focus on reporting race and ethnicity data among future model participants as the federal government works to close equity gaps.

In addition, CMMI will probably simplify its array of payment models and have fewer tracks within those models.

Learn more about the directions CMMI envisions moving with its Medicare alternative pay models in the near future in the Fierce Healthcare article “CMS official:  Don’t expect a lot of fully risk-based payment models going forward.”

MedPAC Meets

The Medicare Payment Advisory Commission met in Washington, D.C. last week to discuss various Medicare payment issues.

Among the issues discussed at MedPAC’s March meeting were:

  • Medicare beneficiary access to care in rural areas
  • skilled nursing facility value-based purchasing program and proposed replacement
  • streamlining CMS’s portfolio of alternative payment models
  • balancing efficiency with equity in Medicare Advantage benchmark policy
  • relationship between clinician services and other Medicare services
  • revising Medicare’s indirect medical education payments to better reflect teaching hospitals’ costs
  • Medicare’s vaccine coverage and payment
  • separately payable drugs in the hospital outpatient prospective payment system

MedPAC is an independent congressional agency that advises Congress on issues involving Medicare.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy.  Because so many patients of private safety-net hospitals are insured by Medicare, MedPAC’s deliberations are especially important to those hospitals.

Go here for links to the policy briefs and presentations that supported MedPAC’s discussion of these issues.

Azar: More Value-Based Care Coming

Medicare may add more value-based care initiatives and alternative payment models to those it already operates, Health and Human Services Secretary Alex Azar suggested at a recent event in Washington, D.C.

During his remarks, Azar spoke about population health benefits, global budgeting for Medicare patients, more primary care programs, and new models that address kidney care and opioid use and hinted at future efforts that address social determinants of health.

Learn more about Azar’s remarks about Medicare value-based purchasing and alternative payment models and other current federal health policy matters in the Healthcare Dive article “HHS chief keeps focus on alternative payment models.”

More Hospitals Gain Than Lose in FY 2020 Value-Based Purchasing Program

Medicare’s value-based purchasing program will reward more hospitals than it will penalize in FY 2020 through its value-based purchasing program.

The program, in which 2700 hospitals are scored in four domains – clinical outcomes, safety, person and community engagement, and efficiency and cost reduction – will distribute $1.9 billion in bonus payments to 1500 hospitals.

Bonus payment average 0.6 percent, with a high of 2.93 percent.  Penalties average -0.39 percent, with a high of -1.72 percent.

Overall, rural hospitals performed better in the safety, person and community engagement, and efficiency and cost reduction categories and had a higher average score nation-wide while urban hospitals produced better clinical outcomes.  Smaller hospitals performed better in safety, person and community engagement, and efficiency and cost reduction.

Hospitals can find a link to their own adjustments here.

Learn more about how Medicare’s value-based purchasing program works and how hospitals will fare in FY 2020 in this CMS fact sheet.

Stark Changes Coming to Facilitate Value Care?

At a Washington, D.C. conference, Centers for Medicare & Medicaid Services Administrator Seema Verma announced that changes coming in Stark law requirements will enable Medicare to make better use of value-based purchasing in its reimbursement system.

In addition to addressing cybersecurity and electronic health record system issues, changes in the anti-self-referral law will seek to facilitate better coordination of care for Medicare patients.  Verma explained the underlying rationale for the anticipated changes, noting that

…in a system where we’re transitioning and trying to pay for value, where the provider is ideally taking on some risk for outcomes and cost overruns, we don’t have nearly as much of a need to interfere with who’s getting paid for what service.

Learn more from the Fierce Healthcare article “Verma promises hospital industry ‘significant’ Stark Law changes later this year.”

CMS Publishes Proposed FY 2019 Inpatient PPS Regulation

Last week the Centers for Medicare & Medicaid Services published a proposal detailing how it envisions paying for Medicare services in FY 2019 under its inpatient prospective payment system.

The following are the proposed rule’s highlights:

  • A 1.75 percent proposed increase of inpatient rates.
  • A $1.5 billion increase in the Medicare DSH uncompensated care payment pool during year two of the three-year phase-in of the use of S-10 uncompensated care data to calculate those payments.
  • The renaming of CMS’s “meaningful use” program to “promoting interoperability,” accompanied by major cuts in the number of measures hospitals must report as part of Medicare’s various quality programs.
  • A greater emphasis on the exchange of health care data among providers.
  • Several changes involving the Medicare area wage index system.
  •  Several requests for information:  one on promoting the exchange of data among hospitals, one on how to foster greater transparency of hospital prices, and one seeking recommendations for regulatory and policy changes to the Medicare wage index.

In the next three days this site will present more details about aspects of the proposed regulation that are of greatest interest to private safety-net hospitals.  The following is a list of what will be covered:

  • Tuesday – inpatient rates, Medicare disproportionate share (Medicare DSH) and the Medicare cost report’s S-10 worksheet, and the Medicare area wage index
  • Wednesday – multi-campus hospitals, the Medicare and Meidcaid electronic health record (EHR) incentive programs, and the Medicare hospital readmissions reduction program
  • Thursday – the Medicare value-based purchasing program, the hospital inpatient quality reporting program, electronic clinical quality measures, and price transparency

You also can learn more by reviewing the proposed 1883-page rule here or reading the CMS fact sheet here.

Serving High-Risk Patients Leads to VPB Penalties

Practices that served more socially high-risk patients had lower quality and lower costs, and practices that served more medically high-risk patients had lower quality and higher costs. These patterns were associated with fewer bonuses and more penalties for high-risk practices.

So concludes a new study that looked at the results of the first year of the Medicare Physician Value-Based Payment Modifier Program.

The study looked at 899 physician practices serving more than five million Medicare beneficiaries, and it points to the continuing challenge of how best to serve patients who pose greater socio-economic risks than the average patient.

Private safety-net hospitals serve far more high-risk patients than the typical American hospital.

Learn more these findings and how they were reached in the study “Association of Practice-Level Social and Medical Risk With Performance in the Medicare Physician Value-Based Payment Modifier Program,” which can be found here, on the web site of the Journal of the American Medical Association.

Report to CMS on Risk Adjustment of Medicare Hospital Payments

The National Academies of Sciences, Engineering, and Medicine has issued its latest report to the Centers for Medicare & Medicaid Services on how to adjust Medicare payments to hospitals based on the socio-economic risk factors hospitals’ patients pose.

At the request of CMS, the Academies created an expert committee to

…identify criteria for selecting social risk factors, specific social risk fascinators Medicare could use, and methods of accounting for those factors in Medicare quality measurement and payment applications.

The committee created for this purpose viewed its goal to be 

…to guide the selection of social risk factors that could be accounted for in VBP [value-based purchasing] so that providers or health plans are rewarded for delivering quality care and value, independent of whether they serve patients with relatively low or high levels of social risk factors.

academies Now, the committee has issued its third report to CMS, and in that report it offers three overarching considerations and five criteria to determine “whether a social risk factor should be accounted for in performance indicators used in Medicare VBP programs.” They are:

  1. The social risk factor is related to the outcome.
  • The social risk factor has a conceptual relationship with the outcome of interest.
  • The social risk factor has an empirical association with the outcome of interest.
  1. The social risk factor precedes care quality and is not a consequence of the quality of care.
  • The social risk factor is present at the start of care.
  • The social risk factor is not modifiable through provider actions.
  1. The social risk factor is not something the provider can manipulate.
  • The social risk factor is resistant to manipulation or gaming.

Ever since the Medicare readmissions reduction program and other value-based purchasing programs were created, NAUH has urged CMS to add a risk-adjustment component to those programs to reflect the special challenges private safety-net hospitals face when serving their low-income communities.

To learn more about what the committee proposed and why it proposed it, see this news release describing its work, this summary of its work, and the full report, titled Accounting for Social Risk Factors in Medicare Payment Criteria, Factors, and Methods.


More Value-Based Care in Medicare’s Future

The Affordable Care Act placed a new, stronger emphasis on the provision of “value-based care” to Medicare beneficiaries, and that trend appears likely to continue in the coming years.

commonwealth fundThe Commonwealth Fund has taken an in-depth look at Medicare value-based purchasing: the evolution of the approach, the increased use of value-based purchasing programs, models of care that emphasize value, and how Medicare might expand its use of value-based purchasing in the future. Go here for its new issue brief Medicare Payment Reform: Aligning Incentives for Better Care.

MedPAC Sends Annual Report to Congress

As required by law, the independent federal agency that advises Congress on Medicare payment issues has transmitted its annual report to Congress with its observations, analysis, and policy recommendations.

The June 2015 report of the Medicare Payment Advisory Commission (MedPAC) addresses the following subjects:

  •  hospital short-stay policy
  • payment policies for Part B drugs
  • value-based incentives for Part B drugs
  • polypharmacy and opioid use
  • risk-sharing in Part D
  • synchronizing policy across Medicare’s various payment models
  • next steps in measuring quality
  • the next generation of Medicare beneficiaries

Find a fact sheet on the MedPAC report here and the complete report itself here.